During the COVID-19 pandemic in the United States, it was mainly women who took on the significant demands of childcare and housework, causing a sharp drop in their labor force participation rate: From February 2020 to April 2020, an estimated 7,000,000 women between 25 and 54 years of age decided to forgo employment. There’s evidence to suggest this mass exodus of women from the labor force was due to school closures and lack of child care.
In this FRED Blog post, we examine the employment levels for women 25-54 years of age and for men 25-54 years of age as well as the number of childcare job postings compiled on Indeed.com in early 2021, after the US economy had moved out of the COVID-19-related recession.
The FRED graph above shows that growth in women’s employment was stronger than (and surpassed) growth in men’s employment as of April 2021. There’s also a correlation between the growth of childcare job postings and the growth of these employment levels: As women returned to work after the COVID recession, the number of childcare requests rose.
One possible explanation for the higher employment growth rate for women is that the US government made childcare more affordable. In early 2021, we can see a disproportionate increase in the percent change of childcare postings. The American Rescue Plan Act was enacted in March 2021 and contained a childcare tax credit that would help pay for the care of eligible children and other dependents. After the Act was enacted, we see a huge spike in the following months of April and May, indicating an increased demand for childcare, possibly to take advantage of this tax credit.
How this graph was created: From FRED, search for and select “Employment Level – 25-54 Yrs., Women.” From the “Edit Graph” panel, modify the frequency to monthly and change the units to display the percent change from a year ago. From the “Add Line” tab, search for and select “Employment Level – 25-54 Yrs., Men,” modify the frequency to monthly, and change the units to display the percent change from a year ago. Add the third line: “Childcare Job Postings on Indeed in the United States,” modify the frequency to monthly, and change the units to display the percent change from a year ago. From the “Format” tab, switch the axis of the childcare job postings to the right. Finally, edit the time window so it shows from January 1, 2021, to June 1, 2021.